The retail industry is undergoing a significant transformation, with the physical store emerging as a major media channel for brands. This shift is largely driven by the digitization of the physical store, which is creating new opportunities for brands to engage with consumers in dynamic and interactive ways.
The Rise of In-Store Retail Media
The digitization of the physical store is a mega trend in retail that is radically transforming the way brands interact with consumers.
Retailers are leveraging technology to create dynamic, interactive media experiences at various touch points within the store, including shelves, end caps, cooler doors, and checkout aisles.
This emerging media opportunity is known as in-store retail media.
In-store retail media provides high-quality branding experiences and is gaining brand adoption. Because in-store media can reach up to 3x larger audience than the digital, it offers a significant upside for leading brick-and-mortar retailers.
This makes in-store retail media a powerful tool for brands looking to extend their reach beyond digital channels and engage with consumers in a more immersive and personalized way.
Retail in a post In-Store Media World
In-store retail media offers several key benefits for brands.
Firstly, it provides incremental brand reach beyond online retail giants like Amazon. This is particularly important for brands looking to diversify their marketing strategies and reduce their reliance on digital channels.
Secondly, in-store retail media has the potential to reach 'the unreachables' – consumers who are less likely to engage with traditional or digital advertising. This makes it a valuable tool for brands looking to connect with hard-to-reach audiences.
Finally, in-store retail media is well-suited to non-endemic advertisers and can drive both branding and performance. This makes it a versatile marketing tool that can support a range of marketing objectives, from increasing brand awareness to driving sales.
The Great Technology Disconnect
Retail media has evolved gradually, with each new channel bringing its own set of software vendors and platforms. This has resulted in a fragmented technology landscape that can be difficult to navigate. Disparate systems may not integrate well, leading to trapped data and a lack of coherent insights across platforms.
Making "New" Money
Retail media needs to work as an incremental revenue stream, not just by cannibalizing existing incomes. However, the fragmented ecosystem often makes it difficult for retailers to understand how much money they're making from media/trade deals, and whether they're fully realizing the incremental revenue opportunity.
Nurturing a New Dynamic with Suppliers
Retailers need to evolve their relationships with suppliers to ensure that retail media delivers its full potential. This involves understanding what advertisers want and building a retail media proposition that aligns with those needs.
Living Up to Advertiser Expectations
Retailers are under increasing pressure to provide advanced audience targeting capabilities and hard proof of their effectiveness. However, many still struggle to provide the concrete evidence about campaign performance that brands need to spend with confidence.
Creating a Structure for Success
Retail media often takes shape as a new division within an existing department, leading to debates about where it should sit. The right answer depends on the retailer's structure, strategy, and objectives.
Capitalizing on the In-Store Retail Media Opportunity
As in-store retail media continues to gain traction, brands need strategies to capitalize on this opportunity.
They will need to identify the unique dynamics of the in-store environment, the most effective touch points for shopper engagement, and leverage those data and technology to create dynamic, interactive media experiences.
In-store retail media is a significant growth opportunity for brands. By leveraging the unique advantages of the physical store as a media channel, brands can engage with consumers in new and exciting ways, driving brand awareness, engagement, and sales.